Clarification

Last week, in a report on GM CEO Rick Wagoner, TheCarConnection reported that Renault/Nissan CEO Carlos Ghosn had written a letter to Tracinda Corp. indicating his approval of the idea of bringing GM into the Renault/Nissan alliance. The communication happened but was verbal, our sources report.

Are Wagoner's Days Numbered? by Jim Burt (7/10/2006)
The writing's been on the wall - and now board members are reading it. 

Ford Cutting Dividend, Director Pay

Ford Motor Co. said Thursday it was cutting the quarterly dividend paid to shareholders and cutting half the pay of the company's board of directors.

Ford directors approved a 50-percent reduction in the dividend, to five cents per share from ten cents per share, during its regular monthly meeting. The new dividend is payable on Sept. 1, 2006 to shareholders of record on Aug. 2, 2006. The Board of Directors voluntarily reduced board member fees by half, the company said.

"Our directors are well aware of the difficulties and sacrifices involved in turning around our company," said Bill Ford, chairman and chief executive officer. "They have underscored this by voting to reduce their own compensation." That cut is expected to save Ford about $20 million quarterly.

Ford is under increasing pressure to speed up the company's turnaround following a $1 billion loss in the first quarter. More losses are anticipated when the company reports its financial results for the second quarter later this month.

The cuts, while not unexpected, unleashed more negativity on the company, which is struggling to keep its Way Forward restructuring plan on track.

"Cutting the dividend is also a negative signal of Ford's future prospects," said Robert Barry, auto analyst at Goldman Sachs. "For example, we do not think a dividend cut would be as necessary if Ford was making good progress on its Way Forward restructuring plan, which targets returning the N.A. auto business to profitability by 2008. It has been our view that this goal is ambitious and unlikely," said Barry.

A new report from Merrill Lynch this week also said Ford is falling behind rivals such as General Motors and DaimlerChrysler AG in introducing new models and could thus lose more market share over the next three years.
Standard & Poor's has a "hold" rating on Ford shares. Goldman Sachs has a "sell" rating on the automaker.

Ford shares closed down 4.65 percent at $6.56 Thursday on a day that the Dow Jones Industrials lost 1.56 percent and 167 points.

Ford operates in 200 markets on six continents and has 300,000 employees and 108 plants worldwide. -Joe Szczesny and Jim Burt

Ford Extending Warranties

Ford Motor Co. is trying to outflank some key competitors such as General Motors and DaimlerChrysler by announcing plans for what it described as the best warranty and roadside assistance packages now available from any full-line manufacturer. The no-deductible, fully transferable powertrain limited warranty on 2007 Ford and Mercury vehicles is now five years or 60,000 miles - better than all Chrysler Group and most GM nameplates, Ford officials said. Lincoln's 2007 powertrain limited warranty is now six years or 70,000
miles - up to 20,000 miles and two years longer than the warranty offered by Cadillac. Ford also plans to offer complimentary roadside assistance, including towing, fuel, and lock-out service for the entire warranty period - services not offered by Toyota and Honda, said Cisco Codina, Ford group vice president, North America Marketing, Sales and Service. Ford also is making side air curtains or its advanced Safety Canopy system with rollover sensor standard equipment on 13 vehicles for 2007. "Ford's goal is to be America's car company - the one that customers expect to set the standard for design, engineering, and the ownership experience," he said.
"When we said Ford was going to look at the world through customers' eyes, we meant every word," he added. "That means bold design, more standard safety features, higher quality and, starting today, the best warranty and roadside assistance packages of any full-line manufacturer - American, European, or Asian." "It's a very consumer oriented strategy," added Codina, who added Ford plans to use the new warranty as a marketing tool. "It certainly has value to the consumers. It offers some real convenience. We think this program is very manageable," for the company, added Codina. Ford's internal quality measurements are improving, which will help minimize the cost, he said.

Pacifica Gets Price Cut

The 2007 edition of Chrysler's Pacifica will be getting a feature almost as appealing as its new drivetrain: a price cut. Chrysler says the Pacifica will carry a base price of $24,890 including destination fees when it goes on sale in the fall. The Pacifica receives mild exterior changes, largely limited to the grille, for 2007. But under the hood is a new 4.0-liter V-6, making 255 horsepower and 265 lb-ft of torque. Mated to a new six-speed automatic, which replaces the former four-speed, the new engine is the most powerful naturally aspirated V-6 in Chrysler's lineup. Side curtain airbags and stability control are also standard on the new Pacifica.

Strike Still On at Hyundai

The labor union at South Korea's top automaker, Hyundai Motor Co., is intensifying its strike action Thursday as its workers worked only two hours during the day. Since June 26, unionized workers have stopped working for several hours each business day as they demand more salaries and better working conditions.

The union's move comes only days after 68-year-old Hyundai Motor Chairman Chung Mong-koo was freed on $1 million bail after two months in detention. Chung was jailed on charges he set up slush funds to pay for political and business favors. -Peter Chang

FROM THE SOURCE headlines from the latest press releases

Mitsubishi Motors to Offer Rockford Corporation Sound Systems in Six Additional Future Models

Honda Becomes First Ohio Company to Achieve Top Environmental Certification

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Autobytel, Inc.	ABTL	3.46	+0.12 (+3.59%)
Autoliv Inc.	ALV	54.00	-0.84 (-1.53%)
AutoNation Inc.	AN	20.41	+0.08 (+0.39%)
ArvinMeritor Inc.	ARM	16.32	-0.37 (-2.22%)
American Axle & Mfr. Holdings Inc.	AXL	14.80	+0.03 (+0.20%)
Ballard Power Systems Inc.	BLDP	5.81	-0.03 (-0.51%)
BorgWarner Inc.	BWA	60.81	-1.80 (-2.87%)
Cummins Inc.	CMI	115.54	-3.32 (-2.79%)
DaimlerChrysler AG (ADR)	DCX	47.93	-0.83 (-1.70%)
Dura Automotive Systems	DRRA	1.80	0.00 (0.00%)
Eaton Corporation	ETN	69.21	-1.82 (-2.56%)
Ford Motor Company	F	6.56	-0.32 (-4.65%)
General Motors Corporation	GM	28.32	-1.30 (-4.39%)
Gentex Corporation	GNTX	13.04	-0.14 (-1.06%)
Goodyear Tire & Rubber	GT	10.08	-0.40 (-3.82%)
Honda Motor Co. Ltd. (ADR)	HMC	30.41	-0.47 (-1.52%)
Johnson Controls Inc.	JCI	82.87	-2.94 (-3.43%)
Lear Corporation	LEA	20.84	-0.46 (-2.16%)
Magna International Inc.	MGA	71.22	-1.53 (-2.10%)
Motorola Inc.	MOT	19.05	+0.05 (+0.26%)
Nissan Motor Co. Ltd. (ADR)	NSANY	20.52	-0.59 (-2.79%)
Sonic Automotive Inc.	SAH	21.52	-0.03 (-0.14%)
Siemens AG	SI	81.05	-2.01 (-2.42%)
Sirius Satellite Radio	SIRI	4.09	-0.13 (-3.08%)
Toyota Motor Corporation (ADR)	TM	99.10	-3.43 (-3.35%)
TRW Automotive Holdings	TRW	25.71	-1.08 (-4.03%)
Tower Automotive Inc.	TWRAQ.PK	0.0901	-0.0049 (-5.16%)
United Auto Group Inc.	UAG	20.11	-0.19 (-0.94%)
Visteon Corporation	VC	7.13	-0.15 (-2.06%)
XM Satellite Radio Hold.	XMSR	13.03	-0.50 (-3.70%)